- SOL has dropped nearly 17% from its recent highs, struggling below $200 due to declining trading volume, memecoin scandals.
- If SOL fails to hold above $180, a drop below $170 is likely, while a breakout above $186 could signal a short-term recovery.
Solana (SOL) remains under bearish pressure, currently trading around $184, struggling to hold above key support levels. The token has experienced a sharp decline of nearly 17% from its recent monthly highs above $220. A combination of ecosystem controversies, decreasing trading volumes, and an impending token unlock contribute to the token’s bearish sentiment.
With the possibility of a further plunge below $170, investors and traders remain on edge about the near-term outlook for SOL.
Memecoin Scandals and Market Sentiment Impact SOL’s Price
The Solana ecosystem has been hit by concerns surrounding memecoins like LIBRA, Pumpfun, and Meteora. LIBRA, endorsed by Argentina’s President Javier Milei, surged and then collapsed, while Meteora and Pumpfun faced criticism for exploiting traders. These have been tagged in scam scandals, which erode confidence among investors and its community. As a result, Solana’s ecosystem has seen a decline in investor confidence, impacting its total value locked (TVL) and trading volume. The exact figures remain fluid amid ongoing volatility, approx TVL drops from its peak of over $12 billion to $8.9 billion.
Crypto Analyst Don Alt in a tweet explained how scam projects contributed to Solana’s recent fall.
The big lesson from this cycle for L1s is that you wanna attract users like SOL did
— DonAlt (@CryptoDonAlt) February 16, 2025
But you somehow want to prevent them from getting scammed to not tarnish your reputation
SOL went from beloved to hated quickly only because everyone on the chain lost all their money to scams
Despite the decline in trading volume, the number of transactions on the Solana network continues to grow, indicating increased activity but with lower capital involvement. Open interest (OI) in Solana derivatives has also fallen from $6.5 billion to $4.1 billion since its all-time high (ATH) of $296, reinforcing uncertainty in the market. Technical indicators suggest that if SOL fails to hold its current support level at $180, a drop below $170 could materialize in the coming days.
Technical Indicators Flash Bearish Signals
Solana has broken below its 200-day MA, facing downside risk. If SOL fails to hold above $175, further declines are likely. A breakout above $209 could trigger a recovery. Additionally, the On-Balance-Volume (OBV) indicator continues to decline, forming lower highs and lows, which confirms a bearish divergence.
Key support levels for Solana are currently at $181.99 and $178.50. If bulls fail to defend this range, the price may dip below $170, which could trigger further panic selling. Conversely, a move above $186.29 is needed for short-term recovery, with the next major resistance levels at $196.11 and $204.42.
On a more positive note, the potential approval of a Solana Exchange-Traded Fund (ETF) by financial institutions like 21Shares, Grayscale, and Bitwise could provide a much-needed boost. An ETF approval would legitimize Solana as an institutional-grade asset, potentially driving new capital into the ecosystem. However, with broader market pessimism and macroeconomic uncertainties, a decisive bullish breakout remains elusive.
